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VOL. 10, ISSUE 2 (2025)
Corporate fraud and misuse of deposits: An analysis of legal safeguards in India
Authors
Dr. Dushyant Kumar, Aditya Pratap Singh
Abstract
Corporate fraud and the improper use of public deposits have surfaced
as significant issues within India's financial and legal framework. The rising
frequency of corporate scandals has sparked worries regarding the effectiveness
of current legal structures and regulatory systems intended to protect investor
interests and promote corporate responsibility. This paper provides a critical
examination of the legal protections available in India to combat corporate
fraud and the misuse of deposits, emphasizing statutory provisions, enforcement
strategies, and judicial actions. Important legislations such as the Companies
Act of 2013, the Prevention of Money Laundering Act (PMLA), the SEBI Act, and
the RBI regulations that oversee Non-Banking Financial Companies (NBFCs) are
analyzed. The functions of regulatory bodies like the Ministry of Corporate
Affairs (MCA), the Securities and Exchange Board of India (SEBI), and the
Reserve Bank of India (RBI) in identifying, investigating, and prosecuting
fraudulent corporate activities are also evaluated. In spite of the existence
of thorough legal provisions, enforcement poses a challenge due to procedural
delays, insufficient coordination among regulatory agencies, and limited
resources. Notable cases such as the Sahara case, the PMC Bank scam, and the
IL&FS crisis highlight deficiencies in oversight and accountability. This
paper advocates for a more cohesive and proactive regulatory strategy, enhanced
protections for whistleblowers, and the fortification of forensic and
investigative capabilities. It also suggests timely judicial interventions and
the improvement of corporate governance standards to mitigate such
malpractices. The study seeks to enrich policy discussions by pinpointing legal
gaps and proposing reforms that can ensure increased transparency, safeguard
depositors, and restore public trust in the corporate sector.
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Pages:44-46
How to cite this article:
Dr. Dushyant Kumar, Aditya Pratap Singh "Corporate fraud and misuse of deposits: An analysis of legal safeguards in India". International Journal of Advanced Research and Development, Vol 10, Issue 2, 2025, Pages 44-46
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